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<div class="iris_headline">IRIS Toolbox Reference Manual</div>



<h1 id="BVAR/Contents">Bayesian VAR Priors: BVAR Package</h1>


<p>The BVAR package is used to create basic types of prior dummy observations when estimating Bayesian VAR models. The dummy observations are passed in the <a href="../VAR/estimate.html"><code>VAR/estimate</code></a> function through the <code>'BVAR='</code> option.</p>
<h4 id="constructing-dummy-observations">Constructing dummy observations</h4>
<ul>
<li><a href="../BVAR/covmat.html"><code>covmat</code></a> - Covariance matrix prior dummy observations for BVARs.</li>
<li><a href="../BVAR/litterman.html"><code>litterman</code></a> - Litterman's prior dummy observations for BVARs.</li>
<li><a href="../BVAR/sumofcoeff.html"><code>sumofcoeff</code></a> - Doan et al sum-of-coefficient prior dummy observations for BVARs.</li>
<li><a href="../BVAR/uncmean.html"><code>uncmean</code></a> - Unconditional-mean dummy (or Sims' initial dummy) observations for BVARs.</li>
<li><a href="../BVAR/user.html"><code>user</code></a> - User-supplied prior dummy observations for BVARs.</li>
</ul>
<h4 id="weights-on-prior-dummy-observations">Weights on prior dummy observations</h4>
<p>The prior dummies produced by <a href="../BVAR/litterman.html"><code>litterman</code></a>, <a href="../BVAR/uncmean.html"><code>uncmean</code></a>, <a href="../BVAR/sumofcoeff.html"><code>sumofcoeff</code></a> can be weighted up or down using the input argument <code>Mu</code>. To give the weight a clear interpretation, use the option <code>'stdize=' true</code> when estimating the VAR. In that case, setting <code>Mu</code> to <code>sqrt(N)</code> means the prior dummies are worth a total of extra <code>N</code> artifical observations; the weight can be related to the actual number of observations used in estimation.</p>
<h4 id="getting-help-on-bvar-functions">Getting help on BVAR functions</h4>
<pre><code>help BVAR
help BVAR/function_name</code></pre>

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<div class="copyright">IRIS Toolbox. Copyright &copy; 2007-2014 Jaromir Benes.</div>
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